Definitions

Define or give the meaning of the

following:
1. Contract – is a meeting of
minds between two persons
whereby one binds himself, with
respect to the other, to give
something or to render some
service.
2. Stipulation pour autrui – is a
stipulation in a contract in which
the contracting parties must
have clearly and deliberately
conferring a favor upon a third
person who has a right to demand
its fulfillment provided he
communicates his acceptance to
the obligor before its revocation by
the obligee or the original parties.
3. Real contract – is a contract
which is perfected by the delivery
of the thing subject matter of
the contract.
4. Perfection of contract – this is
when the parties have come to a
definite agreement or
meeting of the minds regarding the
subject matter and cause of the
contract, upon concurrence
of the essential elements.
II. Discussions
1. May a third person acquire
rights under a contract to which he
is a stranger or be
bound thereby? Explain
Definitions
Define or give the meaning of the
following:
1. Contract – is a meeting of
minds between two persons
whereby one binds himself, with
respect to the other, to give
something or to render some
service.
2. Stipulation pour autrui – is a
stipulation in a contract in which
the contracting parties must
have clearly and deliberately
conferring a favor upon a third
person who has a right to demand
its fulfillment provided he
communicates his acceptance to
the obligor before its revocation by
the obligee or the original parties.
3. Real contract – is a contract
which is perfected by the delivery
of the thing subject matter of
the contract.
4. Perfection of contract – this is
when the parties have come to a
definite agreement or
meeting of the minds regarding the
subject matter and cause of the
contract, upon concurrence
of the essential elements.
II. Discussions
1. May a third person acquire
rights under a contract to which he
is a stranger or be
bound thereby? Explain
Definitions

Define or give the meaning of the following:

1. Contract –a meeting of minds between two persons whereby one binds himself, with respect to the
other, to give something or to render some service.

2. Stipulation pour autrui – is a stipulation in a contract in which the contracting parties must have
clearly and deliberately conferred a favor upon a third person who has a right to demand its fulfillment
provided he communicates his acceptance to the obligor before its revocation by the obligee or the
original parties.

3. Real contract – is a contract which is perfected by the delivery of the thing subject matter of the
contract.

4. Perfection of contract – this is when the parties have come to a definite agreement or meeting of the
minds regarding the subject matter and cause of the contract, upon concurrence of the essential
elements.

II. Discussions

1. May a third person acquire rights under a contract to which he is a stranger or bebound thereby?
Explain

According to Article 1311,

Contracts take effect only between
the parties, their assigns and
heirs, except in case where
the rights and obligations
arising from the contract are
not
transmissible by their nature, or
by stipulation or by provision of
law. The heir is not liable
beyond the value of the properly
he received from the decedent. So,
if he is a third person who
is not part of the contract then he is
a stranger to the contract but
according to Article 1311, If a
contract should contain some
stipulation in favor of a third
person, he may demand its
fulfillment
provided he communicated his
acceptance to the obligor before its
revocation. A mere incidental
benefit or interest of a person is
not sufficient. The contracting
parties must have clearly and
deliberately conferred a favor upon
a third person (stipulation pour
autrui). But there are special
cases which is stated in Article
1312, In contracts creating real
rights, third persons who come
into possession of the object of the
contract are bound thereby, subject
to the provisions of the
Mortgage Law and the Land
Registration laws. If Article 1312
is applicable to the third person
then he is bound by contracts
creating real rights since Article
1312 is an exception to the
general rule that contracts bind
only the parties. Article 1313, also
protects the creditors in
cases where the contract is
intended to defraud them.
According to Article 1314, Any
third
person who induces another to
violate his contract shall be liable
for the damages to the other
contracting party
According to Article 1311, Contracts take effect only between the parties, their assigns andheirs,
except in case where the rights and obligations arising from the contract are
nottransmissible by their nature, or by stipulation or by provision of law. The heir is not liablebeyond
the value of the properly he received from the decedent. So, if he is a third person whois not part of the
contract then he is a stranger to the contract but according to Article 1311, If acontract should contain
some stipulation in favor of a third person, he may demand its fulfillmentprovided he communicated his
acceptance to the obligor before its revocation. A mere incidentalbenefit or interest of a person is not
sufficient. The contracting parties must have clearly anddeliberately conferred a favor upon a third
person (stipulation pour autrui). But there are specialcases which is stated in Article 1312, In contracts
creating real rights, third persons who comeinto possession of the object of the contract are bound
thereby, subject to the provisions of theMortgage Law and the Land Registration laws. If Article 1312 is
applicable to the third person then he is bound by contracts creating real rights since Article 1312 is an
exception to the general rule that contracts bind only the parties. Article 1313, also protects the
creditors in cases where the contract is intended to defraud them. According to Article 1314, Any third
person who induces another to violate his contract shall be liable for the damages to the other
contracting party.

3. When will a person be found by a contract entered into by another?

According to Article 1317, No one may contract in the name of another without
beingauthorized by the latter, or unless he has by law a right to represent him. A contract entered intoin
the name of another by one who has no authority or legal representation, or who has actedbeyond his
powers, shall be unenforceable, unless it is ratified, expressly or impliedly, by theperson on whose
behalf it has been executed, before it is revoked by the other contractingparty.

4. Give the effect of the perfection of a contract.

According to Article 1316, Real contracts, such as deposit, pledge and common datum, are notperfected
until the delivery of the object of the obligation.

III. Problems

Explain or state briefly the rule or reason for your answer.

1. A and B entered into a contract not specifically provided in the Civil Code. Is thecontract valid and
binding?Article 1307 states that, Innominate contracts shall be regulated by the stipulations of
theparties, by the provisions of Titles I and II of this Book, by the rules governing the
mostanalogous nominate contracts and by the customs of the place.

2. S(seller) and B(buyer) entered into a contract of sale. It was agreed that the price shallbe determined
by T, a third person. Can S or B refuse to be bound by T’s determination ofthe price if he does not agree
with the amount thereof?Article 1309 states that, the determination of the performance may be left to
a third person,whose decision shall not be binding until it has been made known to both contracting
parties.And Article 1310 states that, the determination shall not be obligatory if it is
evidentlyinequitable. In such case, the courts shall decide what is equitable under the
circumstances.Therefore, S or B can refuse to be bound by T’s determination and the court shall decide
what isequitable as stated in Article 1310.
3. D owes C P20,000. Both are house painters. It was agreed that D instead of paying C,will paint the
house of E to which E expressed his conformity to C whose service aspainter was previously
contracted by E. Has B the right to enforce the stipulationbetween C and D?As stated in
Article 1311, par 2., If a contract should contain some stipulation in favor of a thirdperson, he may
demand its fulfillment provided he communicated his acceptance to the obligorbefore its revocation. A
mere incidental benefit or interest of a person is not sufficient. Thecontracting parties must have
clearly and deliberately conferred a favor upon a third person.

4. X made an office desk for Y. X told Y that the latter may pay whatever amount he wouldlike to pay for
it. When the desk was finished Y offered to pay P2,000 but X insteaddemanded P3,000, its fair value. Is
X entitled to P3,000?

No, X is not entitled to P3,000 as the agreement was for Y to pay whatever amount he wouldlike to pay.
According to Article 1308, the contract must bind both contracting parties; its validityor compliance
cannot be left to the will of one of them.